Charities Act 2009
Legislation in Ireland can be a little like waiting for a bus, it all arrives at the same time. The long awaited Charities Act 2009 is finally starting to become “live”. The Act is intended to ensure transparency and accountability for all Charities. The intentions are good but, success will only be achieved if all involved in the regulation and operations of Charities can regain the trust of the donating public.
The extensive downturn in Christmas 2013 donations of between 20% – 41% experienced by extremely well known and long established charities highlights the importance of ensuring trust is re-established with the public as a matter of urgency. Scandals of the past have and will continue to have an impact on individuals supported by the various Charities in Ireland until the public genuinely believes the commencement of the Act has real and quantifiable benefits for public donations, and recipients of the extraordinary work carried out by so many unsung heroes in the charitable world.
Úna Ní Dhubhghaill was appointed the first Chief Executive of the Charities Regulatory Authority (CRA) on 1st March, 2014. Personally accountable to the Chief Executive of the Public Accounts Committee she will also be responsible for managing and controlling administration of the CRA.
On 1st May the Minister for Justice announced the appointment of Conor Woods as Chairperson of the CRA along with 15 other members of the CRA.
Charities, their Directors and their Officers will have to get a handle on the new terminology and reporting mechanisms contained within the Act. They will also have to recognise that personal accountability and public access to information is here to stay, and if anything, will be enhanced in the future. To help get started below is a brief outline of some of the new terms and activities contained within the Act.
Activity Report – all Charities regardless of any documents they may file in the Companies Registration Office will have to submit an Activity Report to the Charity Regulatory Authority. It is likely that including the Activity Report as a note within the Annual Accounts will suffice.
Benefit to the Community – referred to under Charitable Purpose [see below] this phrase covers the advancement of community welfare, environmental sustainability, arts, sciences, protection of natural environment, and integration of disadvantaged.
Charity Regulatory Authority – the CRA is not an individual, and is commonly referred to as either the Authority or Charities Regulator. The Authority will be responsible for maintaining a Register of Charities. The CRA will also have a role in helping Charities comply with legislation, and to investigate those Charities that do not comply.
Constitution – refers to existing Memorandum & Articles of Association of a Charity.
Charitable Purpose – for the first time a Charity must, by law, define its charitable purpose which should fall within the prevention or relief of poverty or economic hardship, advancement of education, religion or any other purpose of benefit to the community.
Charity Appeals Tribunal – the Tribunal is intended to deal with appeal processes against decisions of the Charity Regulatory Authority such as refusal of charitable status. It will consist of 5 Members appointed by the Minister. All Tribunal proceedings will be conducted in public.
Charity Trustee – refers to Directors or other officers of the Charity.
Chief Executive – as mentioned above Úna Ní Dhubhghaill is the first Chief Executive of the CRA. Personally accountable to the Chief Executive of the Public Accounts Committee she will also be responsible for managing and controlling administration of the Charity Regulatory Authority.
Establishment Day – the precise date will be determined by the Minister for Justice and is intended to provide a clear and definitive date showing the crossover from existing legislation to the commencement of the Charities Regulatory Authority. The existing role of the Commissioner for Charitable Donations will cease and transfer to the Charities Regulatory Authority on Establishment Day.
Registered Charitable Organisation – is defined as a charitable organisation either registered or deemed to be on the Register.
Register of Charitable Organisations – Charities that existed prior to the commencement of this Act will be deemed to be on the Register. Such charities would before the commencement of the Act have been entitled to tax exemption and have a CHY number. The Register will contain details on where the Charity is registered (in the State, EEA or elsewhere), names of Charity and its Charity Trustees.
The annual registration fee for being on the Register will be based on the gross annual income of a Charity and is likely to range from €10 – €500. An online Register is expected to be in place by middle 2014. Una Ni Dhuhhaill has indicated her intention to contact Charities with an existing CHY number in the Autumn.
There are substantial resources available to Charities as they endeavour to come to terms with the Charities Act and anyone involved in the Charity sector should avail of those resources now. This bus is leaving the Terminal, don’t get left behind!